Obama calls for 'grand bargain' on middle class jobs

CHATTANOOGA, Tenn., July 30 (UPI) -- U.S. President Barack Obama Tuesday called for corporate tax rate cuts and more stimulus spending in what he called a "grand bargain for middle-class jobs."

At an appearance in Chattanooga, Tenn., the president proposed lowering the corporate tax rate from 35 percent to 28 percent, increasing the small business threshold to $1 million and instituting a one-time tax on corporate overseas holdings that are presently exempt from American tax laws.

Obama proposed using the revenue from those actions to increase spending on infrastructure, green energy, aid to community colleges and greater investment in manufacturing hubs.

"I'm willing to work with Republicans on reforming our corporate tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs," the president said. "That's the deal."

Saying it was time middle class Americans began seeing the rewards for working harder, Obama said his focus will be "how we can build on the cornerstones of what it means to be middle class in America."

Obama called on Congress to triple a bipartisan plan to create manufacturing innovation institutes where businesses partner with local universities and government agencies to create new industrial jobs. Fifteen such pilot programs have been started across the country; Obama called on Congress to triple the number to 45.

The president renewed themes he has hit on in the first four-and-a-half years of his presidency. In recent weeks he's sought to make the economy the centerpiece of his message to the American people through a series of similar speeches headed into a fall legislative season expected to feature bitter fights with Republicans over the nation's budget and debt ceiling.

Obama said there has been general agreement among "independent economists, business owners, and people from both parties" on what steps to take to create jobs -- including several he proposed in 2011 in the American Jobs Act.

"Some were passed by Congress," he said. "But most of them weren't, even if they're ideas that have historically had Republican support."

The president said a growing number of Senate Republicans are "trying to get things done" but he accused House Republicans of hurting "a fragile recovery by suggesting they wouldn't pay the very bills Congress rang up, and threaten to shut down the people's government if they can't shut down Obamacare."

"Then, rather reduce our deficits with a scalpel in a way that promotes growth -- by cutting programs we don't need, fixing ones we do, and making government more efficient -- this same group has left in place a meat cleaver called 'the sequester' that harms growth, hurts our military, and guts the investments in education, science, and medical research we need to make this country a magnet for good jobs.

"If folks in Washington want a 'grand bargain,' how about a grand bargain for middle-class jobs?

"If we're going to break free of the same old arguments, where I propose an idea and Republicans say no just because it's my idea, let me try offering something that serious people in both parties should be able to support: a deal that simplifies the tax code for our businesses and creates good jobs with good wages for the middle-class folks who work at those businesses," he said.

Despite the president's warm reception in Tennessee, his proposal for a deal on jobs legislation was met with immediate resistance from Republican leaders on Capitol Hill.

"The plan, which I just learned about last night, lacks meaningful bipartisan input, and the tax hike it includes is going to dampen any boost businesses might otherwise get to help our economy," said Senate Minority Leader Mitch McConnell, R-Ky. "In fact, it could actually hurt small businesses. And it represents an unmistakable signal that the president has backed away from his campaign-era promise to corporate America that tax reform would be revenue neutral to them."

House Speaker John Boehner, R-Ohio, also gave the president's speech a lukewarm reception, The Hill reported Tuesday.

"Remember that we have previously only been willing to do corporate tax reform as part of a larger fiscal agreement that would include ... a proposal to raise over half a trillion dollars from closing loopholes and [raising rates] on high income individuals," he said in a conference call with reporters. "The president is now saying he'd be willing to do this separate from that area of contention between Republicans and Democrats."

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